The Relationship between Earnings Quality and Reformed Laws and Regulations in Public companies transformed through Privatization

Document Type : Original Article

Authors

10.22034/iaar.2012.104668

Abstract

This research, examines the relationship between corporate governance strategies and changes in legal framework and earnings' quality in previously public companies. The criteria selected for corporate governance strategies include ownership concentration, board of directors independency, management ownership, substantial ownership and auditor type; criteria considered for earnings quality are income informativeness, income predictability and accrual components of income. Thus, information from 38 companies listed on  Tehran stock exchange  was collected from 2003 to 2010 using certain traits (304 company-years). The panel data method was used to analyze the data and for testing the hypotheses, the minimum normal squares regression was applied. Results revealed that a significant relationship existed among all corporate governance strategies and changes in legal framework; ownership concentration, board independence and substantial ownership, and income predictability and board  independence and audit type(quality) and the accruals of previously public entities.

Keywords

Accounting and Auditing Research
Volume 4, Issue 15
October 2012
Pages 42-59

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